AT&T has been a very busy company over the past two years, gobbling up smaller carriers and spectrum at an alarming rate in an attempt to bolster its network resources to stay ahead of increased consumer demand for mobile services.
At an investor conference today, AT&T CEO Randal Stephenson noted that the moves will help feed the carrier’s growing LTE network and in turn help drive wireless margins through the efficiencies derived from the technology. Stephenson said the company expects wireless margins to grow up to 5% going forward, which would place the company closer to rival Verizon Communications, which has posted industry-leading wireless margins for the past several years.
AT&T late last week closed on its acquisition of Atlantic Tele-Network’s wireless assets, having to provide some last-minute assurances to regulators that the carrier would ease the technology transition for current ATN customers.
AT&T is also in the midst of acquiring no-contract provider Leap Wireless, in a move that Stephenson said would bolster the carrier’s attack on the no-contract space. That attack will see AT&T broaden the Leap brand nationwide using AT&T Mobility’s network resources, similar to what T-Mobile US is currently doing with its recently acquired MetroPCS brand.
AT&T’s focus on the market is also being boosted by the rapid expansion of its Aio Wireless brand nationwide. The offering provides for flat-rate, unlimited plans that include smartphones running across the carrier’s LTE network.
AT&T earlier this year also closed on a $1.9 billion deal with Verizon Wireless to acquire a substantial number of 700 MHz licenses in the lower B-Block. AT&T noted that deal complemented its other B-Block spectrum holdings that in addition to its lower C-Block holdings are a core part of its ongoing LTE network rollout plans.
Stephenson added that those spectrum deals when combined with its past acquisition of E-Block spectrum from Qualcomm’s failed MediaFLO offering will allow the carrier to offer up a streaming video service using the LTE Broadcast standard. Earlier this year Verizon Communications CEO Lowell McAdam mentioned that the company was looking at the LTE Broadcast standard as a way to transmit broadcast content over Verizon Wireless’ mobile network. Published reports indicated that Verizon was looking to deploy the broadcast technology beginning early next year.
RCR Wireless News talked with Current Analysis senior analyst Lynette Luna at that time about the news on the LTE broadcast front as well as what the chances were that the wireless space could finally crack the broadcast space.
While AT&T has been very busy on the mergers and acquisitions front, Stephenson said that he did not expect any large-scale M&A activity over the next three years, citing the current administration’s desire for at least four nationwide operators. That seemed apparent when regulators shot down AT&T’s $39 billion attempt to acquire T-Mobile USA in 2011.
“For the next three years, we feel large scale M&A is not likely,” Stephenson said. “It seems to us the [Department of Justice] has been loud and clear.”
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